Journal Article
Oil price shocks and inflation
Trehan, Bharat
(2005)
This Economic Letter examines the historical relationship between oil price shocks and inflation in light of some recent research and goes on to discuss what the recent jump in oil prices might mean for inflation in the future.
FRBSF Economic Letter

Journal Article
Pricey oil, cheap natural gas, and energy costs
Hale, Galina; Nechio, Fernanda
(2012)
Historically, oil and natural gas prices have moved hand in hand. However, in the past few years, while oil prices climbed to near record peaks, natural gas prices fell to levels not seen since the mid-1970s as a result of new hydraulic fracturing technology. U.S. consumer energy expenditures are still mainly driven by oil prices, so household energy bills got little relief as natural gas prices fell. Moreover, even though the United States has trimmed crude oil imports, they still equal a substantial share of gross domestic product.
FRBSF Economic Letter

Journal Article
Oil prices and inflation
Cavallo, Michele
(2008)
This Economic Letter examines the impact of rising oil prices on core inflation over the last decade for four economies: the U.S., the euro area, Canada, and the U.K.
FRBSF Economic Letter

Journal Article
Consumer inflation views in three countries
Lynch, Maura; Trehan, Bharat
(2013)
Financial markets and professional forecasters expect central banks to hit their inflation targets. But U.S., British, and Japanese consumers expect inflation to be higher. Data suggest that consumers in these countries don?t pay attention to central bank inflation targets and react sluggishly to persistent shifts in the inflation rate. However, the price of oil apparently influences inflation expectations strongly. It?s possible that consumers use highly volatile oil prices in a rule of thumb for updating their inflation expectations.
FRBSF Economic Letter

Journal Article
Household inflation expectations and the price of oil: it's déjà vu all over again
Trehan, Bharat
(2011)
The University of Michigan survey of consumers shows that expected inflation has moved up noticeably over the past few months, raising concerns that we may be in for a period of rising inflation. However, the increase in expected inflation likely reflects the excess sensitivity of consumers to food and energy prices. Consistent with this hypothesis, household surveys have not forecast inflation well in recent years, a period of volatile food and energy prices.
FRBSF Economic Letter

Journal Article
Oil prices and the U.S. trade deficit
Cavallo, Michele
(2006)
With the price of oil in world energy markets having nearly quadrupled over the last four years, it is little surprise that U.S. import prices have soared. One concern about these higher import prices relates to their implications for the U.S. trade balance, which turned to a deficit in 1992 and has been deteriorating ever since. ; This Economic Letter explores the relation between the surge in oil prices and the trade deficit by first reviewing data on U.S. international trade in goods and services. It then discusses a recent study that examines how the U.S. trade deficit might evolve in ...
FRBSF Economic Letter

Discussion Paper
Oil prices, monetary policy, and the macroeconomy
Fuerst, Timothy S.; Carlstrom, Charles T.
(2005-04)
Every U.S. recession since 1971 has been preceded by two things: an oil price shock and an increase in the federal funds rate. Bernanke, Gertler, and Watson (1997,2004) investigated how much oil price shocks have contributed to output growth by asking the following counterfactual question: Empirically how much would we expect oil price increases to have contributed to output growth if the Fed had kept the rate constant instead of letting it increase? They concluded that, at most, half of the observed output declines can be attributed to oil price increases. Most were actually caused by funds ...
Policy Discussion Papers
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